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2018 (1) TMI 18 - AT - Income TaxDisallowance of salary paid to family members of the management of the society.- Held that:- It is observed that the assessee runs a school having a strength of 1030 students. Smt. Kiran Gupta, who was paid ₹ 1,12,800/-, is the Principal and President of the society. Shri R.K. Gupta, who was paid ₹ 1,38,000/- is the Secretary of the society, looking after overall work at the school. The other two persons, namely, Shri Rohit Gupta and Miss Nidhi Gupta are B.Ed. and drew salary at a nominal level. Payments made to these persons are not excessive, calling for any disallowance. Similar expenses were incurred in the succeeding years as well, which got allowed at the hands of the Assessing Officer. Under these circumstances, the disallowance was wrongly sustained. Disallowance of depreciation and interest - Held that:- It is observed from the assessee’s submissions made before the authorities below that the cars were used by the society for its work of school. The assessee submitted that these cars were used for various purposes, such as, liaisoning with DIOS and CBSE Board etc. Such contentions have not been refuted with any cogent evidence except for the fact that no service of driver was availed and, further, the log book was not maintained. It is seen that the assessee society has used vehicles in the succeeding years as well for which no disallowance of depreciation has been made. CIT(A) erred in sustaining the disallowance of depreciation and the same is directed to be deleted. Disallowance of interest - AR contended that the Assessing Officer did not grant adequate opportunity to the assessee to put forth the evidence in support of this contention - Held that:- Considering the entirety of the facts and circumstances as prevailing in the instant case, set aside the impugned order on this score and remit the matter to the file of Assessing Officer for examining the contention of the assessee in the light of evidence, which it proposes to file Addition of surplus of income - AR contended that the ld. CIT(A) did not give any opportunity before treating utilization of surplus as not backed by any evidence - Held that:- Ends of justice would meet adequately if the impugned order on this issue is also set aside and the matter is restored to the file of Assessing Officer for deciding it afresh as per law, after allowing a reasonable opportunity of being heard to the assessee.
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